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John Daniel Holdings Limited - Agreement regarding manufacture in Gauteng; and
Withdrawal of cautionary announcement
John Daniel Holdings Limited
Registration number 1998/013215/06)
SHARE CODE: JDH
ISIN: ZAE000044343
("JDH" or "the company")
Payloader Kearney"s Truck & Trailer C.C.
Registration number 1997/026386/23
("Kearneys")
- AGREEMENT REGARDING MANUFACTURE IN GAUTENG; AND
- WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Introduction and withdrawal of Cautionary Announcement
LPC Manhattan Sponsors (Pty) Ltd is authorised to announce that, further to the
cautionary announcement dated 10 December 2003, which is hereby withdrawn,
agreement has been reached between JDH"s wholly owned subsidiary, John Daniel
Containers (Pty) Ltd ("JDC"), and Kearney"s ("the agreement") whereby the
manufacture of JDC trailers will be transferred to Kearney"s manufacturing
facilities in Johannesburg. Kearney"s will manufacture all JDC products for JDC
under an exclusive licence. JDC will continue to promote and sell its range of
high technology trailers and has obtained the right to market and sell Kearney"s
range of "Payloader" trailers thereby broadening its product offering.
Following the transfer, the manufacturing facility operated in Mossel Bay by
John Daniel Containers will be closed and the property that it occupies will be
sold.
Rationale and benefits
Shareholders were advised both in the press on 10 October 2003 and in the Annual
Report of 11 November 2003 that the board had put in place a feasibility study
to move the manufacturing facilities closer to its target markets and corporate
clients. After discussions with most of the group"s large clients, and JDH"s
empowerment partner, Ubuhlanti, the decision was taken to restructure JDC in a
manner that will allow it to achieve its forecasts and move to an acceptable
level of profitability. This should also assist in meeting the targets set by
the company"s "Vision 2005" project.
The combination of production being located nearer JDC"s major markets and the
expanded sales and after sales service that can be achieved by using Kearney"s
five associated companies is expected to result in increased sales of JDC
trailers. JDC will be able to offer more competitively priced products as a
result of economies of scale and lower overhead costs. Both companies will
benefit from their combined technical capabilities; particularly the advanced
know-how brought by JDC through its award winning patented designs and by
reduced lead times. The transfer of production means that JDC will be able to
sell its property in Mossel Bay, thus freeing capital to invest in a number of
high technology projects that form part of JDH"s "Vision 2005" project. The
first of these projects is Vinguard, details of which were announced to
shareholders in the company"s latest annual report. Further opportunities are
currently being investigated by the company.
Kearney"s
Kearney"s is a family owned manufacturer of quality, heavy-duty trailers. These
trailers are marketed under the "Payloader" brand name. Annual turnover is in
excess of R100 million. Kearney"s manufactures, sells and services the
"Payloader" range of trailers in Durban, Edenvale, Heidelberg, Wadeville and
Gaborone, Botswana, from all of which bases it is able to provide after sales
service on both "Payloader" and JDC trailers. Kearney"s has built its business
by offering quality products, excellent after sales service and value for money
to its target markets. As part of the agreement with JDC, Kearney"s has secured
the right to market the JDC range of high technology trailers, which should
increase combined sales.
Possible merger
The agreement makes provision for a study to commence immediately to investigate
the feasibility of merging JDC and Kearney"s and a further application for a
listing (subject to the necessary statutory approvals and approval from the JSE
Securities Exchange South Africa) of the merged entity. The time allotted for
this exercise is one year and any merger will be subject to mutual due
diligence.
Johannesburg
16 February 2004
Sponsor
LPC Manhattan Sponsors (Pty) Ltd
Attorneys
Bell Dewar & Hall
Date: 16/02/2004 04:07:05 PM Produced by the JSE SENS Department
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